As U.S. Sen. Richard Blumenthal was in Hartford on Oct. 12 calling for $18 billion in fines against Volkswagen after it admitted to cheating vehicle emissions tests, auto dealers in southwestern Connecticut said they have yet to see an impact on sales. But they do fear some backlash amid intense scrutiny and a criminal investigation.
- Democratic U.S. Sen. Richard Blumenthal formally called Oct. 12 for an investigation of Volkswagen by the U.S. Department of Justice following revelations of rigged emissions systems. Photo courtesy blumenthal.senate.gov
Volkswagen, which also owns Audi, has three local dealerships in Prestige Volkswagen of Stamford, Curran Volkswagen in Stratford and Danbury Volkswagen. A fourth local dealer shut down earlier this year in New Milford.
The German automaker has admitted its engineers rigged software for its diesel passenger vehicles to under-report air pollution measures in excess of government mandates. Blumenthal called for a range of penalties, to include payments to the Environmental Protection Agency amounting to $37,500 for each affected vehicle sold by Volkswagen.
In a telephone interview, Blumenthal told Hearst he wants Volkswagen to offer affected diesel-powered car owners a choice of selling their vehicles back to Volkswagen or issue rebates of as much as $20,000 each, on the justification alone of the impact of the scandal on their vehicles”™ resale values. Blumenthal said the impact extends beyond the car owners.
“In my view, dealers are victims just like consumers,” Blumenthal said. “They had no idea about this fraud. They put their reputations and their business livelihoods on the line for this company and they have been betrayed by this company ”” and I will fight for them.”
Blumenthal is on the Judiciary Committee of the U.S. Senate that oversees the Department of Justice, as well as the Senate Committee on Commerce, Science and Transportation that tracks doings at the Federal Trade Commission.
It is an open question the degree to which the emissions scandal could impact the overall Volkswagen and Audi brands, not just for local dealers but also for suppliers like Harman International Industries, which recently signed a lease renewal on its Stamford headquarters and whose CEO Dinesh Paliwal referenced Volkswagen in August as “a big customer” of the company”™s auto infotainment systems.
In 2009, after Toyota”™s problems with floor mats and accelerator pedals resulted in instances of unintended acceleration in some cars, the Japanese company”™s initial responses were seen as inadequate, according to a case study published by researchers at the University of Minnesota and InfoTrend. Sales tanked 12 percent through the first seven weeks of 2010 compared with the same period in 2009.
- Vehicles on display Oct. 12 at Prestige Volkswagen of Stamford. Photo by Alexander Soule
Managers at Prestige Volkswagen of Stamford and Danbury Volkswagen could not be reached immediately for their own experiences in the weeks following the initial Volkswagen disclosures. In Stratford, Curran Volkswagen has fielded calls from customers with diesel models, adding up to about 20 percent of the dealership”™s business.
“We”™re all very concerned,” owner Chris Curran said. “Everyone is disappointed, and we”™re going to have to make this right. It”™s going to take a major effort from Volkswagen.”
””Dirk Perrefort contributed to this report.
Alex.Soule@scni.com; 203-964-2236; twitter.com/casoulman. Hearst Connecticut Media includes four daily newspapers: Connecticut Post, Greenwich Time, The Advocate (Stamford) and The News-Times (Danbury). See ctpost.com for more from this reporter.
